Some cultures prefer a hierarchical structure with a clear chain of command. Others prefer a flat structure, which is often more collaborative.
Over the next couple of posts, we’ll discuss various organizational structures.
Knowing about these structures as a manager will help you understand how others might be accustomed to working.
The hierarchical structure is probably the most common organizational structure in a workplace.
It has a clear and direct chain of command, with a senior manager at the top, followed by various departmental executives, followed by supervisors/team leads, all the way down to general employees.
Those at the highest level – the CEO, for instance – have the final say in decisions.
The CEO’s decisions may, however, require approval by a board of directors.
Each structure has its pros and cons.
- Provides clear career paths
- Offers a clear chain of command, thus reducing conflict
- Helps businesses streamline processes
- Leaves little room for dissent from those low on the chain (which can be good or bad, depending on how you look at it)
- May negatively impact employee morale
- Can slow decision-making processes, as approval is needed
- May stunt innovation and creativity, as fewer are allowed the power to make decisions
Flat Organization Structure
Small businesses and startups typically use a flat organizational structure.
They must often adjust to a stabler structure once they move past the startup stage.
As you may have guessed, this structure is much less hierarchical with fewer middle managers between the lower-level employees and top dogs.
- Less supervision required
- More responsibility given to employees
- Trust and open communication
- Greater employee involvement and ease of coordination
- Potential for more conflict and confusion
- Sometimes slows decision-making processes, as people cannot agree
- May stunt specified skills or knowledge
A functional structure involves departments made up of specialized work functions, each with a designated and experienced leader.
The decision-making process is generally centralized in this type of organization, with department heads reporting to upper management.
The team leads communicate with each other to coordinate, and the team members below them typically have little involvement with that process.
- Employees focus on specialized tasks
- Each department fosters teamwork toward a joint goal
- Is scalable no matter the size of the business
- Coordination can be lacking
- Big picture context is lost on lower-level employees
- Company processes and strategies can become confused
As you can see, each organizational structure strong and weak points.
The type of structure you choose should be best suited to the business you’re running.
Without a strong structure that supports your business and the type of work culture you wish to promote, you will face difficulties in productivity, coordination, communication, and overall morale.
Next week, we’ll talk about four additional workplace organizational structures.